How Much Do I Pay My Employees?
How do you know how much to pay your employees? What’s everyone else in your industry paying, and what’s fair market value? Well, let’s start with the basics. There are online resources where you can gather some base information. These sites will allow you to select from predetermined job titles and adjust for education level, years of experience and your geographical location. Salary.com is a long-standing resource in this space and has thousands of job titles. There’s also payscale.com that has fewer job titles to choose from, but seems to be a little more up to date with job title data. This site even has Brewmaster as a job title (yeah!).
Next, you can reach out to other contacts that you trust in your industry who might be willing to share pay data with you. If you don’t have any luck there, you could ask any contacts you might have that have changed jobs out of your industry. Online resources and network contacts are great sources of information, but don’t underestimate the value of just asking your prospective employees. This can easily be done during the application or interview process. You may also learn during this process that other benefits you can provide are just as important to employees as their salary. Most employees are looking for medical, dental and a 401(k) plan, but perks like flex-time schedules, casual dress days, more PTO and professional development opportunities have a high value for employees in today’s workforce.
Last, before you can make a final decision on how much to pay your employees, you should do some calculations to see how much you can actually afford to pay them. How much of your budget have you designated to wages? Also, keep in mind that the total employer cost of an employee is more than just the employee’s gross salary. There are employer taxes and the cost of other benefits to take into account. For more on that, stay tuned for part 2 of this blog post – which will be coming soon! The bottom line is there are many resources available to you to help get a handle on how much to pay your staff. But if you’re feeling a little overwhelmed about it, Lance CPA Group can help! Contact us about doing a compensation analysis for your company!